Cotton Insights for July 22, 2016

Cotton prices gained today after witnessing down trend in last couple of days as some fresh buying emerged at the lower due to tight supply-demand balance sheet.

The recent correction in prices attracted mills to source Cotton for their requirements, however demand is only as per requirements.

India Ratings and Research stated that Cotton prices, which have shot up by over 35% since May 2016, unlikely to come down sharply till the arrival of new crop from October despite state-run CCI’s efforts to offload its stock in the market to contain prices.

The fall in domestic production has spiked Cotton prices, which are likely to remain at a high level of Rs 120-127/kg till the Cotton season ending September.

The rise in prices is expected to squeeze profits of ginners and spinners by over 15 per cent in the current fiscal.

Cotton prices are expected to be under pressure on likely fall in acreage.

Cotton acreage has taken a beating owing to the monsoon’s delay in reaching Gujarat.

The appearance of the pink boll-worm in the early-sown plants has compounded woes and made farmers across the State jittery.

Fear of losses from pest attacks, Cotton acreage is likely to decline. This may push up prices further, however increasing demand for man-made Fiber, will contain the price rise.